FRANKFURT, Aug 17 (Reuters) – Germany’s Siemens plans to set up a wind turbine blade factory in Iowa, its first U.S. factory since it entered the wind power business two years ago, to take advantage of growing demand for clean energy there.

The industrial conglomerate said on Thursday it would modernise and equip an existing 20,000 square metre (200,000 square feet) site at Fort Madison, where it expects to employ 250 people and start production in the first half of next year.

“Thanks to the timely tax breaks for wind power passed by Congress and the continuing high oil and gas prices, this market should keep developing very positively,” Siemens’ head of wind power, Andreas Nauen, said in a statement.

The United States trails Europe in developing wind power, with wind energy accounting for less than 1 percent of U.S. electricity production, but its potential is thought to be huge, and current capacity is up 37 percent from last year’s.

Oil major BP Plc (BP.L: Quote, Profile, Research) said earlier this week it had bought U.S. wind energy firm Greenlight Energy Inc. for around $98 million to boost its wind power business in North America.

Siemens’ turbines unit, Power Generation, said it had chosen the Fort Madison site for its proximity to transport links, because moving the 45-metre blades is a logistical challenge.

Siemens, which makes a wide range of products from light bulbs to trains, entered the wind power market by buying Denmark’s Bonus Energy at the end of 2004.

Its capacity has almost tripled since then to around 1,100 megawatts, and its staff has increased to 2,000 employees from 800. Order intake in the first nine months of this fiscal year rose 182 percent over the year-ago period.

Power Generation made sales of 8.1 billion euros ($10.4 billion) in Siemens’ past fiscal year to end-September, around 11 percent of Siemens’ total revenues. It is one of the conglomerate’s most profitable units.

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